diff --git a/api/maven-api-settings/src/main/mdo/settings.mdo b/api/maven-api-settings/src/main/mdo/settings.mdo
index a70d8886ddc8..b73a15817812 100644
--- a/api/maven-api-settings/src/main/mdo/settings.mdo
+++ b/api/maven-api-settings/src/main/mdo/settings.mdo
@@ -45,14 +45,15 @@
       <version>1.0.0+</version>
       <description>
         common base class that contains code to track the source for
-        this instance (USER|GLOBAL)
+        this instance (USER|PROJECT|GLOBAL)
       </description>
       <codeSegments>
         <codeSegment>
-          <version>1.0.0+</version>
+          <version>1.1.0+</version>
           <code>
             <![CDATA[
     public static final String USER_LEVEL = "user-level";
+    public static final String PROJECT_LEVEL = "project-level";
     public static final String GLOBAL_LEVEL = "global-level";
 
     private String sourceLevel = USER_LEVEL;
@@ -64,9 +65,9 @@
         {
             throw new IllegalStateException( "Cannot reset sourceLevel attribute; it is already set to: " + sourceLevel );
         }
-        else if ( !( USER_LEVEL.equals( sourceLevel ) || GLOBAL_LEVEL.equals( sourceLevel ) ) )
+        else if ( !( USER_LEVEL.equals( sourceLevel ) ||  PROJECT_LEVEL.equals( sourceLevel ) || GLOBAL_LEVEL.equals( sourceLevel ) ) )
         {
-            throw new IllegalArgumentException( "sourceLevel must be one of: {" + USER_LEVEL + "," + GLOBAL_LEVEL + "}" );
+            throw new IllegalArgumentException( "sourceLevel must be one of: {" + USER_LEVEL + "," + PROJECT_LEVEL + "," + GLOBAL_LEVEL + "}" );
         }
         else
         {
diff --git a/maven-core/src/main/java/org/apache/maven/execution/DefaultMavenExecutionRequest.java b/maven-core/src/main/java/org/apache/maven/execution/DefaultMavenExecutionRequest.java
index b559fb99045c..8d0fca1b5a3d 100644
--- a/maven-core/src/main/java/org/apache/maven/execution/DefaultMavenExecutionRequest.java
+++ b/maven-core/src/main/java/org/apache/maven/execution/DefaultMavenExecutionRequest.java
@@ -91,6 +91,8 @@ public class DefaultMavenExecutionRequest
 
     private File userSettingsFile;
 
+    private File projectSettingsFile;
+
     private File globalSettingsFile;
 
     private File userToolchainsFile;
@@ -982,6 +984,20 @@ public MavenExecutionRequest setUserSettingsFile( File userSettingsFile )
         return this;
     }
 
+    @Override
+    public File getProjectSettingsFile()
+    {
+        return projectSettingsFile;
+    }
+
+    @Override
+    public MavenExecutionRequest setProjectSettingsFile( File projectSettingsFile )
+    {
+        this.projectSettingsFile = projectSettingsFile;
+
+        return this;
+    }
+
     @Override
     public File getGlobalSettingsFile()
     {
diff --git a/maven-core/src/main/java/org/apache/maven/execution/MavenExecutionRequest.java b/maven-core/src/main/java/org/apache/maven/execution/MavenExecutionRequest.java
index 3989c5fa925d..27cfb49a2527 100644
--- a/maven-core/src/main/java/org/apache/maven/execution/MavenExecutionRequest.java
+++ b/maven-core/src/main/java/org/apache/maven/execution/MavenExecutionRequest.java
@@ -389,6 +389,10 @@ public interface MavenExecutionRequest
 
     MavenExecutionRequest setUserSettingsFile( File userSettingsFile );
 
+    File getProjectSettingsFile();
+
+    MavenExecutionRequest setProjectSettingsFile( File projectSettingsFile );
+
     File getGlobalSettingsFile();
 
     MavenExecutionRequest setGlobalSettingsFile( File globalSettingsFile );
diff --git a/maven-core/src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java b/maven-core/src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java
index 2f2c4075e70c..abfedb6d969f 100644
--- a/maven-core/src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java
+++ b/maven-core/src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java
@@ -77,8 +77,14 @@ public Settings buildSettings( File userSettingsFile )
             getFile( "${maven.conf}/settings.xml", "maven.conf",
                      MavenSettingsBuilder.ALT_GLOBAL_SETTINGS_XML_LOCATION );
 
+        File projectSettingsFile =
+            getFile( "${maven.multiModuleProjectDirectory}/.mvn/settings.xml",
+                     "maven.multiModuleProjectDirectory",
+                     MavenSettingsBuilder.ALT_PROJECT_SETTINGS_XML_LOCATION );
+
         SettingsBuildingRequest request = new DefaultSettingsBuildingRequest();
         request.setUserSettingsFile( userSettingsFile );
+        request.setProjectSettingsFile( projectSettingsFile );
         request.setGlobalSettingsFile( globalSettingsFile );
         request.setSystemProperties( SystemProperties.getSystemProperties() );
         return build( request );
@@ -109,6 +115,7 @@ public Settings buildSettings( MavenExecutionRequest request )
     {
         SettingsBuildingRequest settingsRequest = new DefaultSettingsBuildingRequest();
         settingsRequest.setUserSettingsFile( request.getUserSettingsFile() );
+        settingsRequest.setProjectSettingsFile( request.getProjectSettingsFile() );
         settingsRequest.setGlobalSettingsFile( request.getGlobalSettingsFile() );
         settingsRequest.setUserProperties( request.getUserProperties() );
         settingsRequest.setSystemProperties( request.getSystemProperties() );
diff --git a/maven-core/src/main/java/org/apache/maven/settings/MavenSettingsBuilder.java b/maven-core/src/main/java/org/apache/maven/settings/MavenSettingsBuilder.java
index c79a843d91a6..2d11d7ef4ca9 100644
--- a/maven-core/src/main/java/org/apache/maven/settings/MavenSettingsBuilder.java
+++ b/maven-core/src/main/java/org/apache/maven/settings/MavenSettingsBuilder.java
@@ -36,6 +36,7 @@ public interface MavenSettingsBuilder
     String ROLE = MavenSettingsBuilder.class.getName();
 
     String ALT_USER_SETTINGS_XML_LOCATION = "org.apache.maven.user-settings";
+    String ALT_PROJECT_SETTINGS_XML_LOCATION = "org.apache.maven.project-settings";
     String ALT_GLOBAL_SETTINGS_XML_LOCATION = "org.apache.maven.global-settings";
     String ALT_LOCAL_REPOSITORY_LOCATION = "maven.repo.local";
 
diff --git a/maven-embedder/src/main/java/org/apache/maven/cli/CLIManager.java b/maven-embedder/src/main/java/org/apache/maven/cli/CLIManager.java
index 51824ce45f3b..75e472ffa0ee 100644
--- a/maven-embedder/src/main/java/org/apache/maven/cli/CLIManager.java
+++ b/maven-embedder/src/main/java/org/apache/maven/cli/CLIManager.java
@@ -70,6 +70,8 @@ public class CLIManager
 
     public static final char ALTERNATE_USER_SETTINGS = 's';
 
+    public static final String ALTERNATE_PROJECT_SETTINGS = "ps";
+
     public static final String ALTERNATE_GLOBAL_SETTINGS = "gs";
 
     public static final char ALTERNATE_USER_TOOLCHAINS = 't';
@@ -137,6 +139,7 @@ public CLIManager()
         options.addOption( Option.builder( Character.toString( CHECKSUM_FAILURE_POLICY ) ).longOpt( "strict-checksums" ).desc( "Fail the build if checksums don't match" ).build() );
         options.addOption( Option.builder( Character.toString( CHECKSUM_WARNING_POLICY ) ).longOpt( "lax-checksums" ).desc( "Warn if checksums don't match" ).build() );
         options.addOption( Option.builder( Character.toString( ALTERNATE_USER_SETTINGS ) ).longOpt( "settings" ).desc( "Alternate path for the user settings file" ).hasArg().build() );
+        options.addOption( Option.builder( ALTERNATE_PROJECT_SETTINGS ).longOpt( "project-settings" ).desc( "Alternate path for the project settings file" ).hasArg().build() );
         options.addOption( Option.builder( ALTERNATE_GLOBAL_SETTINGS ).longOpt( "global-settings" ).desc( "Alternate path for the global settings file" ).hasArg().build() );
         options.addOption( Option.builder( Character.toString( ALTERNATE_USER_TOOLCHAINS ) ).longOpt( "toolchains" ).desc( "Alternate path for the user toolchains file" ).hasArg().build() );
         options.addOption( Option.builder( ALTERNATE_GLOBAL_TOOLCHAINS ).longOpt( "global-toolchains" ).desc( "Alternate path for the global toolchains file" ).hasArg().build() );
diff --git a/maven-embedder/src/main/java/org/apache/maven/cli/configuration/SettingsXmlConfigurationProcessor.java b/maven-embedder/src/main/java/org/apache/maven/cli/configuration/SettingsXmlConfigurationProcessor.java
index eeb152751c63..0124d3decfdb 100644
--- a/maven-embedder/src/main/java/org/apache/maven/cli/configuration/SettingsXmlConfigurationProcessor.java
+++ b/maven-embedder/src/main/java/org/apache/maven/cli/configuration/SettingsXmlConfigurationProcessor.java
@@ -69,6 +69,13 @@ public class SettingsXmlConfigurationProcessor
 
     public static final File DEFAULT_USER_SETTINGS_FILE = new File( USER_MAVEN_CONFIGURATION_HOME, "settings.xml" );
 
+    public static final String PROJECT_BASEDIR = System.getProperty( "maven.multiModuleProjectDirectory" );
+
+    public static final File PROJECT_MAVEN_CONFIGURATION_HOME = new File( PROJECT_BASEDIR, ".mvn" );
+
+    public static final File DEFAULT_PROJECT_SETTINGS_FILE =
+        new File( PROJECT_MAVEN_CONFIGURATION_HOME, "settings.xml" );
+
     public static final File DEFAULT_GLOBAL_SETTINGS_FILE =
         new File( System.getProperty( "maven.conf" ), "settings.xml" );
 
@@ -112,6 +119,24 @@ public void process( CliRequest cliRequest )
             userSettingsFile = DEFAULT_USER_SETTINGS_FILE;
         }
 
+        File projectSettingsFile;
+
+        if ( commandLine.hasOption( CLIManager.ALTERNATE_PROJECT_SETTINGS ) )
+        {
+            projectSettingsFile = new File( commandLine.getOptionValue( CLIManager.ALTERNATE_PROJECT_SETTINGS ) );
+            projectSettingsFile = resolveFile( projectSettingsFile, workingDirectory );
+
+            if ( !projectSettingsFile.isFile() )
+            {
+                throw new FileNotFoundException( "The specified project settings file does not exist: "
+                    + projectSettingsFile );
+            }
+        }
+        else
+        {
+            projectSettingsFile = DEFAULT_PROJECT_SETTINGS_FILE;
+        }
+
         File globalSettingsFile;
 
         if ( commandLine.hasOption( CLIManager.ALTERNATE_GLOBAL_SETTINGS ) )
@@ -131,10 +156,12 @@ public void process( CliRequest cliRequest )
         }
 
         request.setGlobalSettingsFile( globalSettingsFile );
+        request.setProjectSettingsFile( projectSettingsFile );
         request.setUserSettingsFile( userSettingsFile );
 
         SettingsBuildingRequest settingsRequest = new DefaultSettingsBuildingRequest();
         settingsRequest.setGlobalSettingsFile( globalSettingsFile );
+        settingsRequest.setProjectSettingsFile( projectSettingsFile );
         settingsRequest.setUserSettingsFile( userSettingsFile );
         settingsRequest.setSystemProperties( cliRequest.getSystemProperties() );
         settingsRequest.setUserProperties( cliRequest.getUserProperties() );
@@ -146,6 +173,8 @@ public void process( CliRequest cliRequest )
 
         LOGGER.debug( "Reading global settings from '{}'",
             getLocation( settingsRequest.getGlobalSettingsSource(), settingsRequest.getGlobalSettingsFile() ) );
+        LOGGER.debug( "Reading project settings from '{}'",
+            getLocation( settingsRequest.getProjectSettingsSource(), settingsRequest.getProjectSettingsFile() ) );
         LOGGER.debug( "Reading user settings from '{}'",
             getLocation( settingsRequest.getUserSettingsSource(), settingsRequest.getUserSettingsFile() ) );
 
diff --git a/maven-model/pom.xml b/maven-model/pom.xml
index a61771f42494..e7483e788647 100644
--- a/maven-model/pom.xml
+++ b/maven-model/pom.xml
@@ -64,7 +64,7 @@ under the License.
                 <artifactItem>
                   <groupId>org.apache.maven</groupId>
                   <artifactId>maven-api-model</artifactId>
-                  <version>4.0.0-alpha-1-SNAPSHOT</version>
+                  <version>4.0.0-alpha-3-SNAPSHOT</version>
                   <type>mdo</type>
                   <outputDirectory>target/mdo/</outputDirectory>
                   <destFileName>maven.mdo</destFileName>
diff --git a/maven-model/src/test/resources/xml/pom.xml b/maven-model/src/test/resources/xml/pom.xml
index 01b679687562..11d2afb1313b 100644
--- a/maven-model/src/test/resources/xml/pom.xml
+++ b/maven-model/src/test/resources/xml/pom.xml
@@ -25,7 +25,7 @@ under the License.
   <parent>
     <groupId>org.apache.maven</groupId>
     <artifactId>maven</artifactId>
-    <version>4.0.0-alpha-1-SNAPSHOT</version>
+    <version>4.0.0-alpha-3-SNAPSHOT</version>
   </parent>
 
   <artifactId>maven-model</artifactId>
@@ -37,12 +37,12 @@ under the License.
     <dependency>
       <groupId>org.apache.maven</groupId>
       <artifactId>maven-api-model</artifactId>
-      <version>4.0.0-alpha-1-SNAPSHOT</version>
+      <version>4.0.0-alpha-3-SNAPSHOT</version>
     </dependency>
     <dependency>
       <groupId>org.apache.maven</groupId>
       <artifactId>maven-xml-impl</artifactId>
-      <version>4.0.0-alpha-1-SNAPSHOT</version>
+      <version>4.0.0-alpha-3-SNAPSHOT</version>
     </dependency>
   </dependencies>
 
@@ -64,7 +64,7 @@ under the License.
                 <artifactItem>
                   <groupId>org.apache.maven</groupId>
                   <artifactId>maven-api-model</artifactId>
-                  <version>4.0.0-alpha-1-SNAPSHOT</version>
+                  <version>4.0.0-alpha-3-SNAPSHOT</version>
                   <type>mdo</type>
                   <outputDirectory>target/mdo/</outputDirectory>
                   <destFileName>maven.mdo</destFileName>
@@ -77,7 +77,7 @@ under the License.
       <plugin>
         <groupId>org.apache.maven</groupId>
         <artifactId>modello-plugin-velocity</artifactId>
-        <version>4.0.0-alpha-1-SNAPSHOT</version>
+        <version>4.0.0-alpha-3-SNAPSHOT</version>
         <executions>
           <execution>
             <id>velocity</id>
diff --git a/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuilder.java b/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuilder.java
index 6a45b3c4e4bc..46b8cdcc8fd8 100644
--- a/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuilder.java
+++ b/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuilder.java
@@ -102,11 +102,16 @@ public SettingsBuildingResult build( SettingsBuildingRequest request )
             getSettingsSource( request.getGlobalSettingsFile(), request.getGlobalSettingsSource() );
         Settings globalSettings = readSettings( globalSettingsSource, request, problems );
 
+        Source projectSettingsSource =
+                getSettingsSource( request.getProjectSettingsFile(), request.getProjectSettingsSource() );
+        Settings projectSettings = readSettings( projectSettingsSource, request, problems );
+
         Source userSettingsSource =
             getSettingsSource( request.getUserSettingsFile(), request.getUserSettingsSource() );
         Settings userSettings = readSettings( userSettingsSource, request, problems );
 
         userSettings = settingsMerger.merge( userSettings, globalSettings, TrackableBase.GLOBAL_LEVEL );
+        userSettings = settingsMerger.merge( userSettings, projectSettings, TrackableBase.PROJECT_LEVEL );
 
         problems.setSource( "" );
 
diff --git a/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuildingRequest.java b/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuildingRequest.java
index f39f57924d0c..54d3a30cf5b8 100644
--- a/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuildingRequest.java
+++ b/maven-settings-builder/src/main/java/org/apache/maven/settings/building/DefaultSettingsBuildingRequest.java
@@ -33,10 +33,14 @@ public class DefaultSettingsBuildingRequest
 
     private File globalSettingsFile;
 
+    private File projectSettingsFile;
+
     private File userSettingsFile;
 
     private SettingsSource globalSettingsSource;
 
+    private SettingsSource projectSettingsSource;
+
     private SettingsSource userSettingsSource;
 
     private Properties systemProperties;
@@ -71,6 +75,34 @@ public DefaultSettingsBuildingRequest setGlobalSettingsSource( SettingsSource gl
         return this;
     }
 
+    @Override
+    public File getProjectSettingsFile()
+    {
+        return projectSettingsFile;
+    }
+
+    @Override
+    public DefaultSettingsBuildingRequest setProjectSettingsFile( File projectSettingsFile )
+    {
+        this.projectSettingsFile = projectSettingsFile;
+
+        return this;
+    }
+
+    @Override
+    public SettingsSource getProjectSettingsSource()
+    {
+        return projectSettingsSource;
+    }
+
+    @Override
+    public DefaultSettingsBuildingRequest setProjectSettingsSource( SettingsSource projectSettingsSource )
+    {
+        this.projectSettingsSource = projectSettingsSource;
+
+        return this;
+    }
+
     @Override
     public File getUserSettingsFile()
     {
diff --git a/maven-settings-builder/src/main/java/org/apache/maven/settings/building/SettingsBuildingRequest.java b/maven-settings-builder/src/main/java/org/apache/maven/settings/building/SettingsBuildingRequest.java
index 92d87d80d75b..6c3539cb032e 100644
--- a/maven-settings-builder/src/main/java/org/apache/maven/settings/building/SettingsBuildingRequest.java
+++ b/maven-settings-builder/src/main/java/org/apache/maven/settings/building/SettingsBuildingRequest.java
@@ -62,6 +62,38 @@ public interface SettingsBuildingRequest
      */
     SettingsBuildingRequest setGlobalSettingsSource( SettingsSource globalSettingsSource );
 
+    /**
+     * Gets the project settings file.
+     *
+     * @return The project settings file or {@code null} if none.
+     */
+    File getProjectSettingsFile();
+
+    /**
+     * Sets the project settings file. A non-existent settings file is equivalent to empty settings. If both user
+     * settings and project settings are given, the user settings take precedence.
+     *
+     * @param projectSettingsFile The project settings file, may be {@code null} to disable project settings.
+     * @return This request, never {@code null}.
+     */
+    SettingsBuildingRequest setProjectSettingsFile( File projectSettingsFile );
+
+    /**
+     * Gets the project settings source.
+     *
+     * @return The project settings source or {@code null} if none.
+     */
+    SettingsSource getProjectSettingsSource();
+
+    /**
+     * Sets the project settings source. If both user settings and a project settings are given, the user settings take
+     * precedence.
+     *
+     * @param projectSettingsSource The project settings source, may be {@code null} to disable project settings.
+     * @return This request, never {@code null}.
+     */
+    SettingsBuildingRequest setProjectSettingsSource( SettingsSource projectSettingsSource );
+
     /**
      * Gets the user settings file.
      *
diff --git a/maven-settings/pom.xml b/maven-settings/pom.xml
index 0286d1fed49a..63c3eeddf63d 100644
--- a/maven-settings/pom.xml
+++ b/maven-settings/pom.xml
@@ -68,7 +68,7 @@ under the License.
                 <artifactItem>
                   <groupId>org.apache.maven</groupId>
                   <artifactId>maven-api-settings</artifactId>
-                  <version>4.0.0-alpha-1-SNAPSHOT</version>
+                  <version>4.0.0-alpha-3-SNAPSHOT</version>
                   <type>mdo</type>
                   <outputDirectory>target/mdo/</outputDirectory>
                   <destFileName>settings.mdo</destFileName>
diff --git a/maven-toolchain-model/pom.xml b/maven-toolchain-model/pom.xml
index bef586cd4c90..f2900385d4d4 100644
--- a/maven-toolchain-model/pom.xml
+++ b/maven-toolchain-model/pom.xml
@@ -67,7 +67,7 @@ under the License.
                                 <artifactItem>
                                     <groupId>org.apache.maven</groupId>
                                     <artifactId>maven-api-toolchain</artifactId>
-                                    <version>4.0.0-alpha-1-SNAPSHOT</version>
+                                    <version>4.0.0-alpha-3-SNAPSHOT</version>
                                     <type>mdo</type>
                                     <outputDirectory>target/mdo/</outputDirectory>
                                     <destFileName>toolchains.mdo</destFileName>